October Hiring Adds 165,000 Jobs, Unemployment Drops to 4.1%

U.S. employers created 165,000 new jobs in October, according to a report released Friday by the Labor Department. The unemployment rate fell to 4.1%, down from 4.2% in September.

The Labor Department revised employment figures for August and September upward by a combined 84,000 jobs. Health care, manufacturing, and business services sectors contributed to the gains. Restaurants and construction firms reduced their workforces during the period.

Average wages rose 3.1% in October compared to the same period last year. That figure represents a larger annual increase than the previous month. Cory Stahle, an economist at the Indeed job-search website, stated that workers are losing ground right now. He added that the longer the trend wears on, the more people will feel the impact.

Inflation reached 3.7% in September. The war with Iran triggered a sharp jump in energy prices earlier this year, causing the cost of living to rise faster than wages for much of the year. Voter frustration with high prices influenced the recent midterm elections, where Republicans lost their majorities in both the House and Senate.

The low unemployment rate has allowed the Federal Reserve to prioritize fighting inflation. The central bank held its benchmark interest rate steady last week. Investors expect the Fed to raise rates when policymakers meet in December.